Re: Glossary anomolies - Posted by Andy
Posted by Andy on February 19, 2006 at 13:25:30:
Thanks for the effort Bill, but I think you’ve missed my point(s).
First, there was no confusion about the index. I merely included that portion so as to have a basis for context.
My statement “But the mortgagee (lender) could also be the grantor (seller) if it’s an owner financed property.” was merely added to point that fact out. As you agreed, there was nothing unusual in MY statement. It was a statement of fact, not a question.
I probably should not have included that statement since it just muddied the water. I apologize for that.
Yet, when it came to the actual question I had, you indicated that I mixed up the words. No, I simply copied what Bill Bronchick has written in the glossary included on this site, and then pointed out what seems to be a discrepancy. I’m glad you agree that there is a discrepancy.
My question: “So, how can the seller be the borrower and the buyer be the lender? That does not compute.”
Was based entirely on Bill Bronchick’s definition, specifically “grantor (the person conveying an interest, usually the seller or mortgagor) and grantee (the person receiving an interest, usually the buyer or mortgagee).”
So to rephrase what BILL says, so that there’s no confusion:
Grantor = seller
Grantor = mortgagor
OTHER definitions I’ve seen elsewhere state:
Mortgagor = borrower (See Mortgagor legal definition of mortgagor as just one example. Many others are available.)
Therefore, if the Grantor is synonomous with the Mortgagor as BILL states, yet the Mortgagor is synonomous with the Borrower as other resources state, then logic would dictate that the Grantor and Borrower are synonomous. Hence: Grantor = Borrower. Substituting yet more synonyms to make this still more obvious: Seller=Grantor and Mortgagor=Borrower therefore, Seller=Borrower. And that makes no sense.
Now that I’ve spent additional time typing this up and further analyzing it, I think I can answer my own question.
Bill was not using Grantor and Mortgagor as synonyms which is how I originally interpreted his statements, he was using them as alternatives.
To make this more clear, if I take his original definition “grantor (the person conveying an interest, usually the seller or mortgagor)” and rephrase it this way: “grantor (the person conveying an interest - such person is usually the seller, though the person conveying interest could also be the mortgagor”, then it becomes more clear that he was not using the terms grantor, seller and mortgagor as synonyms which is how I originally interepreted it, he was actually trying to say that the grantor could be either the seller or the borrower. To beat this horse to death a bit more, if one pictures a chair with the word “grantor” on it, and then has first the seller and then the borrower sit down in the chair, it becomes more clear as to what he was saying. To rephrase it one last time - the person conveying interest can be the seller, or the person conveying interest can be the borrower.
And the flip side of the coin - the person receiving an interest can be the buyer or the person receiving an interest can be the lender. Whichever person receives the interest, be they buyer or lender, that person is known as the grantee.
So in my contract which states "The Seller agrees to sell and assign the said Note and Deed of Trust without recourse as to the future financial performance of the Grantor(s) and assumes no responsibility or liability relating thereto. "
It’s really saying that the person sitting in the Grantor’s chair is the borrower, as the borrower is the one conveying interest in the property to the lender - also known as the holder (or in my case buyer)of the note.
Which I think may make sense, because the lender needs an interest in the property in order to secure his money. I’m willing to convince myself of that unless someone can show me why that’s wrong?
Thank you